Forex Markets Sit Tight for Non-Farm Payrolls
By DailyFX Updates | October 4, 2007
This Friday, we are expecting Non-farm payrolls for the month of September and now more than ever, the fate of the US dollar and stability of the US economy hinges upon the outcome of tomorrow’s labor market report. On September 18th, the Federal Reserve cut interest rates for the first time in 4 years. Although concern about the credit market played a major role in the decision, the central bank also found the first drop in payrolls since September 2003 alarming. At the time, the market was looking for a 100k rise, which is the same forecast for tomorrow, but instead of adding 100k jobs, US companies actually laid off 4k workers. The market is currently divided on whether the Fed will continue to lower interest rates later this month and tomorrow’s non-farm payrolls report will help to confirm or deny that.
Read the rest of our Non-Farm Payrolls Preview
Tags: dailyfx, dollar, fed, interest rates
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Forex - Risk of Bank of England Rate Cut?
By DailyFX Updates | October 3, 2007
Like the European Central Bank, the Bank of England is expected to leave interest rates unchanged. Typically they do not release a statement when rates are not altered, but last month they took the unusual step of doing so. Aside from that time, a statement was only released on two other occasions since the BoE became independent 10 years ago. This was in 1999 and 1998 and on both occasions, interest rates were cut the following month. Therefore even though no one is talking about it, there is a strong chance that the BoE could surprise with an interest rate cut. Even if they don’t, they may release another statement because not doing so would risk sending a hawkish message to the market. As recently as yesterday, the BoE has taken measures to increase its flexibility in the transactions that it conducts with commercial banks which is a signal that credit conditions remains a concern for the central bank.
Tags: currency market, interest rates, rate cut
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Will the Fed be Proactive (50bp) or Reactive (25bp) on September 18th?
By DailyFX Updates | September 12, 2007
The biggest debate in the currency markets at the moment surrounds what the Federal Reserve will do on September 18th. We expect the upcoming interest rate decision to create a great volatility in the financial markets because with less than a week to go, economists and traders have yet to reach a consensus on how much the Federal Reserve will lower interest rates, if at all. According to the 117 economists surveyed by Bloomberg, 69 percent expect a quarter point cut, but according to a DailyFX Poll of 255 voters, only 48 percent expect the Fed to move. It has become painfully obvious that Federal Reserve Chairman Ben Bernanke has encountered the “first year curse,” where new Fed Chairman are faced with a major financial crisis shortly after taking office. The recent rally in the global equity markets and the sell-off in the US dollar indicate that some type of easing is expected, but the question is still, “do current conditions and future outlooks warrant a 25 or 50 basis point rate cut?” In our opinion, this is really a question of whether the Fed chooses to deal with the problems in the US economy proactive or reactively. A 25bp cut would be putting be a band aid on the subprime and credit crisis in hopes that the problem does not exacerbate while a 50bp cut would represent an aggressive move by the Federal Reserve to tackle the problem before it worsens.
Tags: dailyfx, dollar, interest rates
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DailyFX Forex Radio - Carry Trade Wobbles as Risk Remains King - What has to Change?
By DailyFX Radio | August 30, 2007
· Japanese Yen looks to gain on continued equity market volatility
· Speech by Fed Chairman Ben Bernanke to make or break interest rate expectations
· Be sure to view the rest of the week’s event risk on the DailyFX Forex Calendar
To discuss these or any other FX topics with the DailyFX analysts, check out the Forum
Click Link to Listen to our Evening DailyFX Radio PodCast:
http://media.dailyfx.com/podcasts/FXRadioPM083007.mp3
Tags: carry trading, currency trading, dailyfx, dollar, forex, forex blog, interest rates, market volatility
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How Many Fed Rate Cuts is the Market Pricing In?
By DailyFX Updates | August 21, 2007
Take a look at the table below. The market is currently pricing in one 25bp rate cut in September, one in October followed another one by the end of the year. The possibility of an intermeeting rate cut also exists if calm is not restored to the credit markets.
Tags: forex, forextrading, interest rates
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